GBP

The pound suffered in the aftermath of yesterday’s uneventful Bank of England (BoE) meeting. The market had been hopeful a more hawkish outlook might emerge but there’s still no expectation of any immediate policy shifts. This was always unlikely given the previous sentiment and the requirement to remain cautious.

However, this downward move shouldn’t last long as the BoE did upgrade their GDP growth and inflation forecast. It now estimates that total economic output will be around 2.5% and inflation may rise to 3% in the near term. This sharp rise isn’t seen as a long term phenomenon and is viewed as more transitory. As with the US and the Eurozone, price rises are seen as more to do with the rise in global commodity prices rather than as an impact of domestic activity.

Key announcements

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